MONROVIA – The Gold Line Construction Authority may be forced to use eminent domain to purchase property for a rail yard in order to avoid serious delays to the project, officials said last week.

Gold Line officials and Monrovia thought they had a deal for 13.8 acres near South Shamrock Avenue and East Duarte Road to be used for a maintenance yard. But Construction Authority officials have since backed away from the deal because of settlement discussions with a private property owner on the property.

That property owner, Excalibur Holdings, is suing the city and the Construction Authority regarding 4.5 acres of land it owns that is desired for the maintenance yard.

Excalibur, and its attorney Chris Sutton, initially filed a suit against the Authority alleging its environmental analysis was “insufficient.”

In March, Excalibur also filed a petition against the city, citing a 2004 agreement in which the city agreed not to pursue eminent domain against the site.

The Authority can used eminent domain, but had hoped to avoid such measures.

Authority officials said they had pursued the property and negotiations with Monrovia with the understanding the Excalibur property – and all private property lands – were available and they would not encounter any litigation.

The Authority is now asking for Monrovia to share in the costs to settle the lawsuit with Excalibur.

“If the city can’t come to terms, then our only alternative is to condemn the property,” Construction Authority CEO Habib Balian said. “What is hanging in the balance is the entire project.”

Monrovia officials said they don’t intend to open their wallet to settle a lawsuit against the Authority.

“We believe Monrovia will handle our lawsuits and they will handle their lawsuits,” Mayor Mary Ann Lutz said. “They decided they want Monrovia to pay for part of their lawsuits.”

On the line, besides the land itself, are procurements – purchased material locked in at a price – for the project that expire on Oct. 31. If the Gold Line doesn’t have at least 50 percent of the land for the maintenance yard by that date, the procurements are lost, Balian said.

If that happens, the project would need to find a new site, conduct an environmental impact report, and authorize new procurements. That process could delay the project another two years, pushing the completion date from 2015 to 2017, Balian said.

But the delays would be the least of the Authority’s problems, Balian said.

The delays would cost the project between $100 to $150 million, drying up its budget, he said. That would, essentially, end the project, he said.

That possibility has lead to a hearing of necessity – the first step in condemning the property with eminent domain – set for July 5.

The Authority board will then decide whether to proceed with eminent domain for the Excalibur property, Monrovia’s properties, both or neither, Balian said.

“You would always prefer to settle, but sometimes settlement is not an option if the parties are not negotiating correctly,” Balian said. “We are building a project that has a greater public good.”

If eminent domain is pursued, all sides would still be able to negotiate throughout the process.

Lutz’s said the potential use of eminent domain by the Authority was “not good.”

Monrovia thought they had a deal for the Authority to purchase the property at about $59 million. Through eminent domain the city would probably get about $17 million, Lutz said.

“Am I concerned? Absolutely,” Lutz said. “I will tell you what I told them. We will fight that with everything we have.”

If the project doesn’t work out, Lutz said Monrovia wouldn’t be to blame.

“Are (Gold Line officials) prepared to condemn a city that offered them property when nobody else would?” Lutz asked. “(A city) that negotiated in good faith? That is just asking for the negotiated deal they agreed to? This property was slotted for transit orientated development: housing, retail and office space. It was never meant for a maintenance yard. We did it for the good of the region.”

Balian said the Authority is already overpaying for the value of the land, and the issues between Excalibur and Monrovia devalues the land further.

“If we knew there was this cloud over the title of the property, we would have factored that into our negotiation,” he said. “Why would we have done what we have done if we knew there was this preclusion of the sale going forward?”

Lutz said that information was told to the Authority from the beginning.

Daniel Tedford is the Assistant Managing Editor of Digital News. He graduated from Cal Poly Pomona and has been working in journalism since 2008. During that time, he has sat next to a Pulitzer Prize winner, been interviewed by Robert Siegel about a faux Temple City army with a 'supreme commander' and accidentally interviewed a Hollywood movie director about Little League baseball. When not working, he's an avid Los Angeles Angels fan, cooks a mean roast chicken and has read every Kurt Vonnegut novel. He also fancies himself an expert in the best sandwiches in the San Gabriel Valley, if anyone ever cares to ask.